Statoil Profit Slides More Than Estimated as Production Declines

By Mikael Holter -
May 2, 2013

Statoil ASA (STL), Norway’s biggest energy
company, said profits fell by 29 percent in the first quarter on
lower oil and gas output in Norway, Brazil and as a terrorist
attack shut a facility in Algeria.

Adjusted net income fell to 12 billion kroner ($2.1
billion) from 16.8 billion kroner a year earlier, the Stavanger-
based company said today, missing an average estimate of 13.7
billion kroner in a Bloomberg survey of 16 analysts. Net income
dropped to 6.4 billion kroner from 15.1 billion kroner in the
first quarter of 2012, while sales declined to 162.2 billion
kroner from 194.8 billion.

“We deliver financial results impacted by lower production
and reduced prices,” Chief Executive Officer Helge Lund said in
a statement. “We continue to deliver good industrial progress
according to plan. As previously announced, production in 2013
will be lower than in 2012.”

Statoil, of which Norway’s government owns 67 percent, is
expanding abroad to raise production to more than 2.5 million
barrels of oil equivalent a day in 2020 from 2 million barrels
in 2012, with gains in U.S. output accounting for two thirds of
that growth. The company has said production would fall in 2013
after it sold some Norwegian assets and on lower-than-expected
growth of its U.S. shale gas output.

First-quarter production fell to 1.998 million barrels of
oil equivalent a day from 2.193 million barrels a day in the
same period last year, the company said. That beat the 1.985
million-barrel estimate from a survey of 9 analysts.

The company took a 4.9 billion kroner writedown on a
contract at its Cove Point terminal.

In Amenas

Five Statoil employees were among the 38 killed in this
year’s terrorist attack at In Amenas in Algeria, which is run by
BP Plc, Statoil and Sonatrach. While the plant restarted in
February, it won’t be back to full capacity before the end of
2013, according to the Algerian government.

Statoil also saw partial outages at domestic fields
including Oseberg and Troll due to technical issues, according
to the Norwegian Petroleum Directorate. The company’s Snohvit
gas field in the Barents Sea was shut from the end of January to
the end of April. The company also said output was affected at
its Peregrino field in Brazil.

Norway’s crude production will fall for a 13th consecutive
year in 2013 to less than half a 2000 peak, the directorate said
in its annual outlook January. Gas sales are expected to fall to
106.5 billion cubic meters from a record 114.8 billion cubic
meters in 2012, according to the NPD.

Statoil is seeking to keep its production level in Norway
at about 1.4 million barrels of oil equivalent in 2020. It’s
planning on raising its production outside its home country to
1.1 million barrels.

Statoil got an average of $103.5 a barrel for oil in the
first quarter, down from $111.5 a year earlier, and 2.01 kroner
a cubic meter for gas, compared to 2.26 kroner. Brent oil
averaged $112.6 in the first quarter, down from $118.5 a year
earlier.